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The two-day Irish tax appeal is underway, with both Apple and Ireland appealing against a ruling that the Cupertino company must pay €13B ($14.3B) in underpaid tax over more than two decades.
Apple isn’t pulling any punches, its lawyer arguing that the ruling ‘defies reality and common sense’ …Background
We recently provided a quick summary of events to date.
Apple funneled the revenue from all its sales throughout the EU through its European HQ in Ireland. Apple likely chose the location because the country already had an extremely low rate of corporation tax compared to other EU countries, at just 12.5%, and the Irish government further sweetened the deal with special arrangements which meant the iPhone maker paid even less.
The EU ruled that these arrangements were illegal. It was the Irish government, rather than Apple, which was found to have broken the law, but because the arrangement was not lawful it meant that Apple owed the taxes which should have been collected.
As both parties appealed, it was agreed that Apple would pay the sum into an escrow account, where it would be held pending the appeal.
Apple CFO Luca Maestri is heading a team of six execs who will be giving evidence in the case.Irish tax appeal – opening arguments
Reuters reports Apple’s opening arguments in the case.
The European Union’s order for Apple to pay 13 billion euros ($14 billion) in back taxes to Ireland “defies reality and common sense,” the U.S. company said on Tuesday, as it launched a legal challenge against the 2023 ruling.
The iPhone maker also accused the executive European Commission of using its powers to combat state aid “to retrofit changes to national law,” in effect trying to change the international tax system and in the process creating legal uncertainty for businesses.
One of Apple’s arguments is somewhat disingenuous.
“The Commission contends that essentially all of Apple’s profits from all of its sales outside the Americas must be attributed to two branches in Ireland,” Apple’s lawyer Daniel Beard told the court […]
“The activities of these two branches in Ireland simply could not be responsible for generating almost all of Apple’s profits outside the Americas.”
The reason that profits from multiple countries are being attributed to Ireland is, of course, precisely because Apple chose to funnel all revenue from EU countries to two companies based there.
Apple also didn’t deny the very low rate of tax paid on money received in Ireland.
Beard dismissed criticism of the 0.005% tax rate paid by Apple’s main Irish unit in 2014, which was cited by the Commission in its decision, saying the regulator was just seeking “headlines by quoting tiny numbers”.
Paying an average global tax rate of 26%, Apple has said it is the largest taxpayer worldwide and is now paying around 20 billion euros in U.S. taxes on the same profits that the Commission said should have been taxed in Ireland.
Ireland, which is also appealing, made two main arguments. First, that such rulings should not be retroactive. Second, that the EU is effectively trying to fix a global tax problem with a local ruling.
“As Ireland has already emphasized, it undermines legal certainty if state aid measures are used to retrofit changes to national law … and legal certainty is a key principle of EU law; one upon which businesses depend,” Beard said.
“Some may want to change the international tax system; but that is a tax law issue – not state aid,” he said.
There will be further arguments from Apple and the Irish government throughout the day, and the European Commission is expected to make its case tomorrow. The judges will also hear arguments from Luxembourg, Poland and the European Free Trade Association, each of which has its own angle on the legality of the ruling.
Although the Irish tax appeal hearing is short, we shouldn’t expect the matter to be settled anytime soon: a ruling is expected to take several months, and whichever side loses will almost certainly appeal to the European Court of Justice.
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Non-profit group Fair Tax has accused Apple of ‘poor tax conduct’ for using aggressive tax avoidance measures to reduce its overall tax rate to 17.1% over the past decade, less than half the official corporate tax rate of 35%…
Corporate tax is levied only on profits, so after all operating expenses and investments have been deducted from total revenue.
To be clear, Apple is not accused of any legal wrong-doing. Unlike tax evasion, tax avoidance is perfectly legal – but does mean there is less money to spend on public services and infrastructure, says Fair Tax.
Tax matters. It helps to fund vital public goods and services and when paid fairly, it ensures a level playing field for businesses large and small.
We want a future where all businesses are proud to pay their fair share of tax [but] profits continue to be shifted to tax havens, especially Bermuda, Ireland, Luxembourg and the Netherlands […]
When multinational corporations abuse their tax responsibilities to society, they weaken the supports that our economies need to work well and create wealth.
Of the six US tech giants accused of not paying their fair share, Apple isn’t ranked as one of the worst offenders. Indeed, it gets the second-best report after Microsoft. Its tax payments do, however, represent a significantly lower percentage of its profits than most businesses, especially on overseas income.
Presents itself as “the world’s largest taxpayer” and it certainly makes the largest tax contribution of the Silicon Six, having paid $93.8bn in income taxes this decade (albeit on profits of $548.7bn and revenue of $1,888.0bn). However, cash tax paid as a percentage of profit over the decade is still a relatively low 17.1%. The trend of low current tax provision in connection with foreign profits continues in 2023, with just $3.9bn booked on $44.3bn of foreign profit, giving a booked current tax rate of just 8.9%.
Amazon is listed as the biggest offender when it comes to poor tax conduct, followed by Google, Netflix, Apple, and Microsoft.
Fair Tax suggests it is in the long-term financial interests of big tech to pay a fair amount of tax, to avoid future financial shocks and damage to their brand image.
The international tide is turning on the acceptability of corporate tax avoidance. The idea of countering the profit-shifting of Big Tech multinationals via the introduction of digital sales taxes has taken root in many countries. Investors need to look afresh at the future impact that this will have on company valuations and income flows. Not least because the OECD is now leading multilateral efforts to address the tax challenges from digitalisation of the economy, and is looking to ensure that profitable multinationals pay tax wherever they have significant consumer-facing activities and generate their profits.
More than 130 countries have agreed on the need for global tax reform, including ensuring that companies pay tax in each of the countries in which they operate.
We are currently awaiting a decision on the appeal by Apple and Ireland against the €13B ($14.5B) tax ruling.
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Unfortunately, researchers think it could be challenging to regulate a AI can comprehend information better than humans, our processing power will be limited. We may never be able to govern the super-intelligent AI if we are unable to understand its intellect. But surely all AI is designed to be human-friendly? Okay, sure. But according to the authors of recent research, if we don’t fully comprehend the scenarios that AI can generate, we cannot design empathy towards humans in artificial intelligence. The authors of the new article contend that we cannot establish rules like “do no harm to humans” until we are aware of the kinds of situations that an AI is likely to encounter. We are unable to impose restrictions once a computer system operates at a level beyond the capacity of our computer program will come to a conclusion (and stop) or continue incessantly looking for the solution in a loop. Turing demonstrated that while it is feasible to know the solution for certain programs, it is not possible to know the solution for every program that might be constructed. While we can know that for some specific programs, it is mathematically impossible to develop a mechanism that will allow us to know that for every hypothetical program that might ever be written, as Turing demonstrated through some clever math. That brings us back to AI, which is a super-intelligent state that might conceivably store every AI defeating humans in these games. Manuel Alfonseca, a computer scientist at the Autonomous University of Madrid and the study’s primary author, notes that the topic of whether artificial superintelligence could be managed is an old one. It dates at least to the 1940s and Asimov’s First Law of Robotics. The following are the three “Laws of Robotics” by Issac Asimov in the 1942 short story “Runaround” : 1. A robot may not injure a human being or, through inaction, allow a human being to come to harm. 2. A robot must obey the orders given to it by human beings except where such orders would conflict with the First Law. 3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Laws.
Unfortunately, researchers think it could be challenging to regulate a super intelligent AI . The explanation is simple: ifcan comprehend information better than humans, our processing power will be limited. We may never be able to govern theif we are unable to understand its intellect. But surely all AI is designed to be human-friendly? Okay, sure. But according to the authors of recent research, if we don’t fully comprehend the scenarios thatcan generate, we cannot design empathy towards humans in artificial intelligence. The authors of the new article contend that we cannot establish rules like “do no harm to humans” until we are aware of the kinds of situations that anis likely to encounter. We are unable to impose restrictions once a computer system operates at a level beyond the capacity of our programmers . Researchers quash any hope to stop AI. This is due to a superintelligence’s multifaceted nature, which makes it potentially capable of mobilizing a variety of resources to accomplish goals that may be beyond human comprehension, let alone being under human control. The “halting problem,” which Alan Turing first presented in 1936, serves as the foundation for the team’s justification. It makes an effort to comprehend if awill come to a conclusion (and stop) or continue incessantly looking for the solution in a loop. Turing demonstrated that while it is feasible to know the solution for certain programs, it is not possible to know the solution for every program that might be constructed. While we can know that for some specific programs, it is mathematically impossible to develop a mechanism that will allow us to know that for every hypothetical program that might ever be written, as Turing demonstrated through some clever math. That brings us back to AI, which is a super-intelligent state that might conceivably store every program in existence at once in its memory. Similar to this, an AI that has been designed to never hurt people may conclude (and stop) or not. In either case, humans are unable to calculate and contain. Researchers suggest that to contain AI, it might be cut off from specific networks or portions of the internet to restrict its capabilities, especially if it’s extremely intelligent. The schedule is a little less gloomy. It will likely be several years before humanity faces such an existential computational reckoning, according to at least one assessment. Fears that artificial intelligence (AI) is capable of surpassing the strongest human wits in games like chess, go, and jeopardy may one day go rogue have been reported alongside news ofdefeating humans in these games. Manuel Alfonseca, a computer scientist at the Autonomous University of Madrid and the study’s primary author, notes that the topic of whether artificial superintelligence could be managed is an old one. It dates at least to the 1940s and Asimov’s First Law of Robotics. The following are the three “Laws of Robotics” by Issac Asimov in the 1942 short story “Runaround” : 1. A robot may not injure a human being or, through inaction, allow a human being to come to harm. 2. A robot must obey the orders given to it by human beings except where such orders would conflict with the First Law. 3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Laws. Now, Alfonseca and his co-workers argue that because of fundamental computing-related limitations, it may be impossible to operate a super intelligent AI . The researchers proposed that any program aimed at ensuring that a super intelligent AI cannot harm humans must first model the behavior of the computer to foresee potential outcomes. The super-smart computer would therefore need to be stopped by this containment mechanism if it truly may cause harm. The scientists asserted that no containment program could, however, replicate the behavior of the AI and anticipate, with 100 percent accuracy, if its actions may cause harm. The program may not catch errors while attempting to precisely replicate AI behavior or anticipate the outcomes of AI decisions. Although it may not be possible to control a super-intelligent artificial general intelligence, it should be possible to control a super-intelligent narrow AI—one specialized for certain functions instead of being capable of a broad range of tasks like humans. On the other hand, there is no need to spruce up the guest room for our future robots quite yet.
Employers must withhold a portion of employees’ pay to pay employment taxes. Two sorts of employment taxes are taken out of an employee’s gross pay.What is Payroll Tax?
Unemployment insurance and social security contributions are examples of payroll taxes. It’s a tax in which both the company and the employee participate. The FICA (Federal Insurance Contributions Act) levy covers healthcare costs and social security contributions. The retiree’s monthly payout is based on the social security tax the worker contributed throughout their working years. Insurance against joblessness is provided by the Federal Unemployment Tax Act (FUTA), and medical costs are covered by Medicare beginning the year after retirement, regardless of age.What is Income Tax?
All levels of government impose some form of tax on citizens’ incomes. A municipal income tax is added in certain areas, while others do not. State income taxes and payroll taxes are typically imposed by each state independently. To avoid paying federal income tax, just check the appropriate box on Form W−4. The company withholds a portion of the payment for tax purposes. This tax payment must be made to either the state or federal government. After the government gets its share, the withheld wages are returned to the workers.Differences: Payroll Tax and Income Tax
The following table highlights how Payroll Tax is different from Income Tax −
Characteristics Payroll Tax Income Tax
Contributors Payroll taxes are split evenly between employers and workers. An employee is responsible for paying the entire income tax.
Consists of Payroll taxes include social security, unemployment, and medical care. Depending on where you reside, you may owe several levels of taxation on your income− some are collected at the state level, others at the federal level, and yet others at a local level (such as a municipal tax that is paid for the locality where you dwell).
Source Wages, or the money an employee earns from his work, are the primary factor used to determine how much money must be withheld for payroll taxes. A person is required to pay taxes on all of their income. It’s possible to send this money once a week, once a month, or even once a day. The income tax is also calculated from income in other ways, such as by renting out a room in their home, investing in the stock market, banking on the interest on their savings, etc.
Nature of Tax Payroll taxes is regressive compared to income taxes since the tax brackets are not adjusted for inflation. Income tax is considered progressive because it grows proportionally with the employee’s compensation, according to a set of income brackets.
Purpose Governments typically rely on income taxes to fund their operations.Conclusion
While both federal and state taxes have unique characteristics, we can all agree that they both represent a significant portion of the earnings paid to employees. Both taxes are being levied for different reasons, and we need to know how much we’re paying and how it’s being distributed. Paycheck withholding taxes include, among others, federal income tax and state and local payroll taxes.
Compared to the tax rates applied to individuals’ incomes, the payroll tax is a more regressive collection method. This is because payroll taxes are only levied on money coming in, and most payroll taxes have a maximum salary before they kick in.
In general, interest rates are stable over much of the middle−income range, but they decline gradually as one approaches the top end of the income spectrum. Income tax is a type of tax that everyone must pay based on how much money they make each year. If we can identify the distinctions, we can better understand the function of each tax.
A UK antitrust case against Apple has once again been thrown out, after an appeal tribunal ruled that the original decision was correct – that the UK’s competition watchdog had missed a legal deadline.
The ruling stands despite the fact that two Apple App Store policies were found to be anticompetitive, and even though the tribunal appeared to agree that its own decision was likely to have “undesirable or unfortunate results” …UK antitrust case against Apple
Things kicked off when two of Apple’s App Store policies were claimed to be anticompetitive.
First, Apple bans cloud gaming services in the App Store. This means that a developer cannot offer an app that provides access to multiple games played via cloud servers. It’s suggested that the company’s aim here is to protect its own share of per-game revenue, and to block competition to its own Apple Arcade subscription gaming service.
Second, while Apple allows any developer to create its own web browser, and offer it through the App Store, the Cupertino company only approves browsers that use its own WebKit rendering engine. This makes it impossible for a developer to, for example, make a browser app that is faster than Safari – and Apple also blocks access to some Safari features, like Apple Pay integration.
The UK’s competition watchdog, the Competition and Markets Authority (CMA), found last June that both policies were indeed anticompetitive.Problem 1: The meaning of the word “study”
While the CMA had said that it was investigating these issues, it had referred to its investigation as a “market study” rather than a “market investigation.’ Only something labelled as an investigation gives the legal power to impose sanctions, so no action could be taken.
To get around this problem, the CMA opened a new case into the same two issues, this time labelled as an investigation.Problem 2: The meaning of the word “shall”
However, Apple argued that the CMA had missed a deadline to open an investigation. That’s because the law states that the regulator “shall” open an investigation on the same date it published the results of the initial study. Apple said that the word “shall” means the same as “must”; the CMA argued that the word instead granted it the power to open the investigation immediately, but not the obligation.
While Apple’s interpretation seemed the most logical, there are in fact legal precedents on both sides, so the CMA appealed to The Competition Appeal Tribunal.The CMA’s appeal is rejected
We said at the time that Apple appeared to have the stronger case, and this was indeed borne out by today’s ruling – reported by Reuters.
The Competition Appeal Tribunal quashed the decision to open the investigation and on Wednesday refused the CMA’s application for permission to appeal against that ruling […]
But, in its decision refusing permission to appeal, the tribunal said that the law on when the CMA can open a market investigation is clear.
“The letter of the law matters, even if it generates undesirable or unfortunate results,” the tribunal said.
That may not be the end of it, however. The CMA is still free to take its case to The Court of Appeal, the UK equivalent of the US Supreme Court. The regulator hasn’t yet said whether or not it will do so, stating only that it is “carefully considering the tribunal’s decision and […] considering our next steps.”
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Binance Coin (BNB), the token native to the world’s leading cryptocurrency exchange, Binance, at press time, was finally enjoying some degree of bullish momentum after a long period of consolidation.
Consider this, last month, BNB fell by as much as 59% as the result of a sharp sell-off across the cryptocurrency market. The world’s third-largest altcoin, at the time of writing, was trading around the $415-level, having climbed by over 22% in just one week. Here, it’s also worth noting that the crypto’s transactional volume rose by a staggering 42% in a 24-hour window too.
Reasons for the price hike?
“The long-term vision for BNB is for it to become the native token on multiple application-specific blockchains. BNB was never intended to replace Bitcoin or Ethereum. To become a true mass-adopted application, BNB must be able to facilitate billions of transactions per day. In its current form(s), we still have a long way to go. We are working on it.”
As per this blog, Binance (BNB) introduced the concept of ‘transactional mining.’ Binance pioneered periodical burning of fees, with the exchange team guaranteeing to destroy the part of tokens generated by fees. It became the one-stop solution both for widespread cryptocurrency services and exotic solutions (Binance Education, Binance Charity).
According to the same, Binance also developed the concept of ‘initial exchange offering’ (IEO), a token sale organized through an exchange instead of the project’s website.
In 2023, it surged 18x in four months. Its all-time high, $686, was registered on major spot exchanges. More recently, the company even aided regions hit by the global pandemic as a part of its philanthropy efforts.
BNB’s social volume also registered a green uptick (+24.5%), with the same projecting a bullish sentiment within the space.
What’s more, the aforementioned bullishness wasn’t limited to on-chain metrics and price charts alone, with many in the community highlighting the same too.
I believe Binance coin $BNB will be bigger than apple or Amazon because it’s a stock, a crypto, and smart chain.
— Davinci Jeremie (@Davincij15) June 1, 2023
Binance CEO Changpeng Zhao was quick to respond to the aforementioned assertion, however, with the exec only disagreeing with one aspect of the same. He tweeted,
Not a stock, but the other part are spot on. 😜
Where we are going, we don’t need stocks. 🛸
— CZ 🔶 Binance (@cz_binance) June 2, 2023
Here’s a reality check
BNB’s market cap, at press time, was $64.8 billion, an impressive value in the cryptocurrency market. Alas, the figure was still well behind the same for Apple and Amazon, both of which had a market cap of $2.09 trillion and $1.63 trillion, respectively.
One can argue that such claims are no more than a far-fetched dream, especially considering the sheer difference in market valuations.
Historically, digital currencies have taken a shorter period of time to attain tops in market valuation than many traditional assets out there.
Consider this – Bitcoin took only 12 years to hit a market cap of $1 trillion (Before corrections set in, that is). Amazon and Apple took a longer time. Similarly, altcoins such as Ethereum may soon be on their way to hit the said level too.
Binance’s CZ shared the same sentiment when he tweeted,
The best performing #crypto assets have out performed all the best performing traditional assets in the last decade. Same will be true for the next decade.
— CZ 🔶 Binance (@cz_binance) June 1, 2023
Taking into account the increased level of BNB adoption, plus CZ’s additional influence as well as the success of other Binance projects like the Binance Smart Chain, the asset just might have a chance to do the unthinkable.
In fact, a recent article by AMBCrypto had even projected BNB’s rise to a $1,000-mark.
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